Non standard

Tuesday, 14 October 2014

Self-build mortgages

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One of the benefits of a self build project is that (statistically speaking) a completed self-built home is worth an average of 30% more than it cost to build.

This fact, coupled with the allure of personalisation and the prestige that comes with owning a one-of-a-kind property, is rapidly contributing to the growing popularity of self-build projects. Most self builders do not actually carry out the building work themselves (though a wise self-builder will pitch-in wherever/whenever possible), but will oversee and manage a project from start to finish.

Professional advice

You may need to refer to an architect or other professional project manager (like a chartered surveyor or equivalent) if you haven't had much experience with building work before, and such experts will usually charge you a fee based on a percentage of the build costs. Depending on what type of management package you opt for, you will probably have access to varying levels of involvement. A project manager (whether you or someone acting on your behalf) will handle everything from negotiating contracts and obtaining quotes to taking on additional contractors where required.

Too much on your plate

One of the top reasons why self build projects fail is that the self-builders take more upon themselves than they can handle. Whatever happens; it is vital that you take your part in the project seriously (whatever your part might be) and you should get help whenever you need it. Hiring tradesman is not just a simple matter of opening up the yellow-pages and calling a carpenter, brick layer, plumber and electrician; you need to have the right people with the right skills on site at specific points during the project. Keeping the task to a timetable is vital to keep down costs.

Completion prior to mortgage

Previously the only mortgages available to self-builders were arrears staged-payment self-build mortgages, meaning that a particular build stage had to be reached and completed before additional funding was released. This typically meant that anyone looking to self-build would need to be cash-rich at the beginning of the project if they were to stand any chance of getting it off the ground. Now days, advance staged-payment self-build mortgages are available to help get the ball rolling from an earlier point in the project because funds are released before each stage begins.

Insurance

This type of mortgage is known as an "Accelerator Mortgage", allowing people to borrow up to 95% of both build and construction costs and offers self-builders the chance to stay in their old home while the new one is being built. No matter what type of self build project you are undertaking, you must make certain you are covered by non-standard construction insurance. Self-build insurance might be harder to come by than standard types, as insurers perceive it as being too high-risk.

With HomeProtect you can get a competitive quote for self-build insurance cover, no matter what type of project you are undertaking or what you are building your new home out of.